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FutureGen is Back



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FutureGen, the supposed near-zero emission power-plant in Illinois, might be back on track after new cost estimates were calculated. From the New York Times:

WASHINGTON (AP) — The Energy Department failed to prepare a proper analysis and made a $500 million math error when it decided to shelve an experimental coal-fired power plant slated for central Illinois, according to a report from congressional auditors released on Wednesday.

The project, known as FutureGen, would be located in Matoon, Ill., if the project were revived and could provide a boost for economic development in the coal-rich, east-central part of that state. But more importantly, its advocates say it could provide a roadmap for reducing the amount of carbon dioxide emitted from coal production.

The FutureGen project was conceived as a leading effort to capture and store carbon dioxide, a gas strongly linked to global warming. The Illinois town was selected for the project after it beat out two proposed sites in Texas.

Perfecting technology to capture and store carbon dioxide is viewed by many energy experts as an important step because it would mitigate the environmental drawbacks of coal-fired energy. Coal is one of the cheapest ways to provide energy, but its emissions contribute significantly to greenhouse gases in the atmosphere.

The Bush administration withdrew its support from the project, known as FutureGen, a year ago, citing concerns that its cost had doubled.

Those concerns about increased costs were exaggerated, according to a report prepared by the Government Accountability Office for Rep. Bart Gordon, D-Tenn., chairman of the House Science Committee.

According to the report, the Department of Energy made its decision based on an assumption that construction and material costs for FutureGen would ”continue escalating substantially in the indefinite future” and that costs were likely to double.

But the report cites economic forecasting organizations, including the Energy Department’s own Energy Information Administration, that have concluded cost increases for building power plants do not generally continue in the long run.

The Bush administration decided to pull the plug on FutureGen after investing $174 million in the project.

The GAO report released on Wednesday blames the Bush Administration’s math error on the way it compared cost estimates for the project. According to the report, one estimate was based on so-called ”constant dollars,” which reflect the buying power of dollars in 2005. The other estimate was inflation-adjusted, with dollars worth less each year because of inflation.

That led the Bush administration to peg the tab on FutureGen at $1.8 billion, up from $950 million — or nearly double. According to the GAO report, an apples-to-apples comparison puts the cost of FutureGen at an estimated $1.3 billion, up 39 percent from its original price.

Illinois Sen. Dick Durbin, the Senate’s No. 2 Democrat, said the report was more evidence the Bush administration had erred in stopping FutureGen.

”We always knew the DOE’s logic was flawed,” Durbin said in a statement. ”Now it turns out there math was wrong too.”

Mark Hemingway in February wrote about how funding in the stimulus bill might be used for FutureGen. Anyone want to bet on the final costs for the project, if it goes forward?



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